<b>Germany 2008:</b> Sales Down, Exports Up
The most memorable moment in the German bike industry last year was the burial of IFMA, once the world’s largest two-wheeler exhibition and the pride of the national bicycle and motorcycle industry. IFMA had been ailing for several years, before KoelnMesse finally pulled the plug on the former international showcase. It leaves behind a September timing that is being claimed by several European organizers of bike shows.
BAD SODEN, Germany – The most memorable moment in the German bike industry last year was the burial of IFMA, once the world’s largest two-wheeler exhibition and the pride of the national bicycle and motorcycle industry. IFMA had been ailing for several years, before KoelnMesse finally pulled the plug on the former international showcase. It leaves behind a September timing that is being claimed by several European organizers of bike shows.
Shortly after the decision of the KoelnMesse to cancel IFMA, rival fairground Messe Munich announced an ambitious plan for the introduction of a new bike show, backed by the buying organisation ZEG, which will have its annual dealer meeting during the exhibition. This new show indicates there is enough dynamism in this market for a second show alongside the highly popular Eurobike. While Messe Munich’s Bike Expo concept is aimed at consumers, Eurobike has evolved from a bike event into a global trade and consumer show. On top of that, another new event in Germany was launched this spring, the European Handmade Bicycle Exhibition. This niche event saw a successful first edition in what could be an indication of the growing interest in made-to-order bikes.
Less sales, more export
According to the German industry organization ZIV, the market was already in trouble last year. In 2008 total sales were 6% lower than in 2007. In 2008 some 4.32 million bicycles were sold with an average price of € 386. In 2007 the average price was just € 367. Due to the rising average price of the bicycles the value of the total market declined by just one percent to € 1.7 billion. “The rise of the average price was mainly the result of the growth in e-bikes sales” stated Rolf Lemberg, GM of the industry association ZIV. “We estimate the total market, including P&A and repairs/maintenance at between 3 and 3.5 billion Euro.”
Sales at non-IBD stores were especially under pressure. The do-it-yourself stores and food markets saw their market share down from 34% in 2007 to 30% in 2008. This decrease was to the benefit of IBDs. Their market share went up to 63% in units and to 80% in turnover. Remarkably internet sales have been stable at 6% since 2006. This distribution channel seems to have reached its limit in Germany as far as bicycles are concerned.
There was no major shift in bike sales by category. Trekking and city bikes still represent about half the market. The most promising segment, as in many other European countries, is e-Bike sales. Although still relatively small, just 2.5% in 2008, the German market represents one third of the European e-Bike market with 100,000 units sold in 2008. According to ZIV all the major players in this segment are very positive about the outlook for e-Bikes sales in Germany. On the other hand, ZIV also expects that the rapid growth of e-Bike sales in Germany will taper off in 2009. In 2007 this market grew by 62.5%, in 2008 by 54% and the forecast for 2009 is 20%. The total European market is expected to grow by 33% this year. ZIV emphasizes the importance of the e-Bike segment for German retailers. The average retail price of e-Bikes is much higher than for standard bikes. Moreover, e-Bikes create more business opportunities, as they need to be serviced more frequently.
One of the most remarkable changes in the German market last year was the extreme growth in the number of exported bikes. This figure went up from 575,000 units in 2007 to 980,000 bikes last year. Unfortunately, ZIV cannot explain this 70% jump. The organization noted that the exported bikes’ parts were partly produced locally and partly re-exported. In the past France and Austria were the most important export markets for Germany. This situation has changed completely as France is not even mentioned anymore in the ZIV statistics and the new number one export country is Belgium. Last year some 191,000 bikes were exported to this neighbouring country. The number two export market is the Netherlands with 178,000 bikes and third is Austria with 128,000 bikes.
The ratio between locally produced and imported bikes remained more or less the same last year. Of all bicycles sold in Germany, 41% were produced locally. That is just 1% more than in 2007. Imported bikes still command most of the market. Just like in previous years, the Taiwanese industry is the main exporter to Germany with 488,000 units. Number two is Thailand with 333,000 bikes while Poland, Lithuania and Indonesia still make up the top five supplier countries. There were no major changes to the list of countries of origin.
The ZIV is very careful in their forecast for 2009 sales. The winter in Germany has been long and cold, but when spring finally started sales took off rapidly. The unemployment rate is expected to rise in 2009 as well, mainly due to layoffs in the automobile industry, hitting the spending power of the Germans. The worst-case scenario will certainly affect bicycle sales for sports and recreation use.
The industry has also high expectations for the state-run program to promote inner-city cycling. Congestion and environmental problems have already forced city councils to ban specific type of cars from city centres. For the cities the promotion of the use of bicycles could be helpful in solving their problems. This spring the German bicycle industry started a bicycle promotion campaign to attract attention for the positive effects of bicycle use. “Pro Fahrrad” includes a national poster campaign and an internet platform.